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Abe Flexer: Economic inequality should not trump democracy

Posted:
01/19/2014 01:00:00 AM MST

Economic inequality is the defining issue of our time. But we can’t remedy the effects of inequality just by raising the minimum or living wage or even by improving the low/stagnant real wages of recent decades. Fixing all these failures of a humane society are important, but will not address the fundamental problem.

The inequality that really matters is one of wealth and influence. The principle of one person, one vote is being replaced by the practice of wealth trumping democracy.

The inequality that needs to be undone is that of unearned wealth perpetuated by an anti-democratic tax code. Our current tax code rewards the rich for being able to distort our government, rewarding them by increasing the gap between the super-wealthy and the rest of us. Here are a few examples:

The dodge of “carried interest,” enables a few hedge fund managers to enjoy tax rates much lower than the rates the rest of us pay.

The mortgage interest deduction on million dollar vacation homes(think the Romneys) mocks the sensible goal of making home ownership affordable for ordinary folks.

Tax breaks for major corporations that get billions in tax rebates (think GE) raises tax rates for those of us who can’t afford clever tax lawyers.

These are just a few examples of Alice in Wonderland tax policies that benefit only the wealthy at the expense of workers whose real incomes have been stagnant for many years. And the rest of are taxed at rates higher than are the super-rich (think Warren Buffett).

Worst of all, wealth buys the influence to keep or expand tax benefits for the already wealthy. That is the inequality that needs to be eliminated but will remain as long as wealth distorts politics.

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